Quantity on Hand is what is physically sitting on your shelf. Now you can have orders for those quantities but those orders have not yet shipped and the goods have not yet been pulled off the shelves. Now the transaction quantity would be what is on the sales or purchase order. So if you 100 deluxe widgets sitting on your shelf with sales orders for 25 you still have 100 deluxe widget sitting on your shelf until you invoice those 25. In this case the allocated quantity is 25 and you quantity available would be 75. Your quantity on hand is still 100. Qty on Hand Qty Allocated Qty Available 100 25 75 these are the quantities before invoicing 75 0 75 these are the quantities after invoicing So you can see the net qty available remains the same but the qty on hand goes down by 25 as does the qty allocated because once you invoice they are pulled from the shelves.
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